P.V. Ramana Reddy, Hyd, Hyderabad V. ITO, Ward-6(3), Hyderabad

ITA 1852/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59094 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1999-2000
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Peak credit; Wrong claim; Onus to prove; Revised return; Documents seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1852/HYD/2011 : A.Y. 1999-00 I.T.A. NO. 1853/HYD/2011 : A.Y. 2000-01 I.T.A. NO. 1854/HYD/2011 : A.Y. 2001-02 I.T.A. NO. 1855/HYD/2011 : A.Y. 2002-03 I.T.A. NO. 1856/HYD/2011 : A.Y. 2003-04 I.T.A. NO. 1857/HYD/2011 : A.Y. 2005-06 SHRI P.V. RAMANA REDDY HYDERABAD PAN: ADFPP2181F VS. INCOME TAX OFFICER WARD-6(3) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI P. MURALI MOHAN RAO RESPONDENT BY: SHRI B.V. PRASAD REDDY DATE OF HEARING: 12.12.2011 DATE OF PRONOUNCEMENT: 06.01.2012 O R D E R PER CHANDRA POOJARI, AM: THESE SIX APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE DIFFERENT ORDERS OF THE CIT(A)-IV, HYDERABAD DATED 22.9.2011 FOR THE ASSESSMENT YEAR 1999-2000 TO 2003-04 AND A.Y. 2 005-06. SINCE ALL THESE APPEALS BELONG TO SAME ASSESSEE AND THE ISSUE INVOLVED IN ALL THESE APPEALS BEING IDENTICAL, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE GRIEVANCE OF THE ASSESSEE IN THESE APPEALS IS W ITH REGARD TO LEVY OF PENALTY U/S. 271(1)(C) OF THE INC OME-TAX ACT, 1961. I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 2 3. BRIEF FACTS OF THE ISSUE ARE THAT THERE WAS A SEARC H OPERATION CONDUCTED IN THIS ALONG WITH THE PERSONS AND CONCERNS RELATED TO SUJANA GROUP OF COMPANIES ON 7 TH OCTOBER, 2004. CONSEQUENT TO THE SEARCH, NOTICE U/S. 153A O F THE ACT WAS ISSUED. IN RESPONSE, RETURNS OF INCOME FOR A.Y S. 1999- 2000 TO 2003-04 AND A.Y. 2005-06 WERE FILED ON 13.1 2.2006 DECLARING INCOMES AS UNDER: A.Y. INCOME RETURNED (RS.) 1999-00 2,25,000 2000-01 1,95,400 2001-02 1,95,400 2002-03 1,90,400 2003-04 1,85,400 2004-05 9,22,000 2005-06 9,54,040 3.1 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, DOCUMENTS IDENTIFIED AS A/PVR/1 TO A/PVR/7 WERE SEI ZED FROM THE RESIDENCE OF THE ASSESSEE. THESE SEIZED DOCUME NTS ALONG WITH A DOCUMENT IDENTIFIED AS A/SUIL/100 SEIZED FRO M THE PREMISES OF M/S. SUJANA UNIVERSAL INDUSTRIES LTD., HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER FOR COMPUTING U NDISCLOSED INCOME IN THE SAME OF THE ASSESSEE. DURING THE COU RSE OF SEARCH AND POST SEARCH INVESTIGATIONS, STATEMENTS U NDER OATH WERE RECORDED. THE STATEMENTS WERE RECORDED ON 7.1 0.2004 AND 1.12.2004 U/S. 132(4) OF THE ACT DURING THE COU RSE OF SEARCH AND SUBSEQUENTLY ON 14.2.2004 U/S. 131 OF TH E ACT. 3.2 ON THE BASIS OF SEIZED DOCUMENTS A/PVR/1 TO A/PVR/4 , ADDITIONS HAVE BEEN MADE FOR A.YS. 1999-2000, 2000- 01 AND 2001-02 FOR AMOUNTS OF RS. 36,00,000, RS. 1,05,00,0 00 AND RS. 2,03,00,000, RESPECTIVELY. ON THE BASIS OF A/PVR/5 TO I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 3 A/PVR/7 SUBSTANTIAL AMOUNTS ADDED AS UNDISCLOSED IN COME CONSISTING OF ORIGINAL AMOUNTS AND INTEREST AS NARR ATED IN THE GROUNDS OF APPEAL. A SHOW CAUSE LETTER WAS ISSUED ON 28.9.2006 BY THE ASSESSING OFFICER WHEREIN VARIOUS ISSUES WERE RAISED AND ADDITIONS PROPOSED ON THE BASIS OF A/PVR /5 TO A/PVR/7 AND A/SUIL/100. THE DETAILS OF ADDITIONS O N THE BASIS OF A/PVR/1 TO A/PVR/4 AND A/PVR/5 TO A/PVR/7 ARE AS UNDER: A/PVR/1 TO A/PVR/4 A.Y. AMOUNT (RS.) 1999-2000 36,00,000 2000-2001 1,05,00,000 2001-2002 2,03,00,000 THE ABOVE AMOUNTS HAVE BEEN HELD BY THE ASSESSING O FFICER AS INTEREST PAID. 3.3 A/PVR/5 TO A/PVR/7 A.Y. PRINCIPAL (RS.) INTEREST (RS.) TOTAL (RS.) 2002-03 2,38,59,880 57,26,371 2,95,86,251 2003-04 64,95,120 72,85,200 1,37,80,320 2004-05 84,94,920 93,23,980 1,78,18,900 2005-06 1,18,35,0800 1,21,64,280 2,39,98,380 THE ABOVE ADDITIONS HAVE BEEN MADE SINCE THE AMOUNT S MOBILISED FROM GROUPS AS PVRR AND VR1 REMAIN UNEXPL AINED. 3.4 A/PVR/5 TO A/PVR/7 A.Y. AMOUNT (RS.) 2002-03 3,36,00,000 2002-04 3,36,00,000 2004-05 3,36,00,000 2005-06 3,36,00,000 I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 4 3.5 WHILE MAKING THE ABOVE ADDITIONS ON ACCOUNT OF INTE RESTS, THE ASSESSING OFFICER HAS OBSERVED THAT BASED ON LO OSE SHEET BUNDLES A/PVR/7, AVERAGE INTEREST PAYMENT PER MONTH COMES TO RS. 28,00,000. THE ASSESSING OFFICER NOTED THAT PARTICULARS OF INTEREST PAYMENT WERE AVAILABLE FOR EIGHT MONTHS I.E., FOR SEPTEMBER 2004, AUGUST 2004, JULY 2004, OCTOBER 200 2, SEPTEMBER 2002, NOVEMBER 2001, SEPTEMBER 02 AND JU LY 2003. ACCORDINGLY, THE ASSESSING OFFICER ESTIMATED UNACCOUNTED INTEREST PAYMENT FOR ABOVE ASSESSMENT Y EAR AT RS. 3,36,00,000 @ RS. 28,00,000 PER MONTH. 3.6 FURTHER DURING THE COURSE OF SEARCH, STATEMENT OF S RI P.V. RAMANA REDDY WAS RECORDED WHERE HE STATED THAT THE RELEVANT TRANSACTIONS RELATE TO SUJANA GROUP AND OTHER INVES TMENT COMPANIES BELONG TO SUJANA GROUP. HOWEVER, HERE AL SO IT WAS STATED THAT HE HAD NO INTEREST IN THE SUJANA GROUP OF COMPANIES AND NO KNOWLEDGE OF THE CONTENTS OF THE L OOSE DOCUMENTS IN A/PVR/5 TO A/PVR/7. HIS ANSWERS RECOR DED ON 7.10.2004 VIDE QUESTION NOS. 13 TO 15 ARE EXTRACTED AS UNDER: Q. NO. 13 IN THE COURSE OF THE SEARCH AT YOUR RESIDENTIAL PREMISES, CERTAIN DOCUMENTS HAVE BEEN FOUND AND THE SAME DETAILS HAVE BEEN INVENTORIED. YOUR ATTENTION IS INVITED TO THE DOCUMENTS FOUND AND INVENTORIED AS ANNEXURE A/PVR/7 (45 LOOSE SHEETS). PLEASE GO THROUGH THIS BUNDLE AND EXPLAIN THE TRANSACTIONS RECORDED ON EACH OF THESE SHEETS: ANSWER SHEET NOS. 39 TO 45, THESE SHEETS CONTAIN ROUGH CALCULATIONS OF THE AMOUNTS MOBILISED BY ME ON BEHALF OF SUJANA GROUP OF COMPANIES TOWARDS SHARE APPLICATION MONEY. THE DETAILS IN THESE SHEETS ARE IN MY OWN HAND WRITING. I I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 5 MUST HAVE MOBILISED APPROXIMATELY A CRORE OF RUPEES FOR AND ON BEHALF OF SUJANA GROUP OF COMPANIES. I SHALL COMPILE THE ACTUAL DETAILS OF THE FUNDS MOBILISED TOWARDS SHARE APPLICATION MONEY AND ALSO TOWARDS UNSECURED LOANS AND HAND LOANS AND SUBMIT THE LIST BY 11.10.2004. Q. NO. 14 YOUR ATTENTION IS AGAIN INVITED TO THE TRANSACTIONS NOTED ON SHEET NOS. 35, 33, 29, 27, 2, 20, 19, 15, 14, 11, 10, 8, 4 AND 3 WHICH CONTAIN THE TRANSACTIONS MARKED AGAINST YOUR NAME (VR1, VR2, VR & PVRR). PLEASE EXPLAIN THE TRANSACTIONS MARKED AGAINST YOUR NAME IN THESE SHEETS: ANSWER THE TRANSACTIONS MARKED AGAINST VR1, SUMMARY (ON PAGE NOS.) IN THE ABOVE SHEETS GIVE THE DETAILS OF THE FUNDS MOBILISED BY ME FOR THE SUJANA GROUP. HOWEVER, ONLY A PART OF THE FUNDS SHOWN AGAINST VR1 HAS ACTUALLY BEEN MOBILISED BY ME. PART OF THE TRANSACTIONS/FUNDS HAVE NOT BEEN MOBILISED BY ME IN THIS ACCOUNT. THE FUNDS SHOWN IN VR2 ACCOUNT FOR THE MONTHS JULY, AUGUST AND SEPTEMBER SHOWN AS MOBILISED BY ME HAVE NOT ACTUALLY BEEN MOBILISED BY ME. THE SUJANA GROUP JUST HAVE MENTIONED MY NAME. Q. NO. 15 I AM SHOWING YOU LOOSE DOCUMENTS FOUND DURING THE COURSE OF SEARCH IN YOUR RESIDENCE. THE LOOSE SHEETS NUMBERING 1 TO 100 ARE SUMMARISED AS ANNEXURE A/PVR/6. PLEASE GO THROUGH THE DOCUMENTS AND EXPLAIN THE SAME. ANSWER SHEET NOS. 29 TO 36 AND 37 RELATE TO SHARE APPLICATION MONEY COLLECTED FOR VARIOUS GROUP COMPANIES FOR SEPTEMBER 2002 OF SUJANA GROUP BY DIFFERENT PERSONS ... PAGE NOS. 41 TO 49 RELATE TO I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 6 SHARE APPLICATION MONEY COLLECTED FOR VARIOUS GROUP COMPANIES OF SUJANA GROUP FOR OCTOBER 2002 BY DIFFERENT PERSONS. PAGE NOS. 50 TO 55 RELATE TO NOVEMBER, 2001 COLLECTION OF SHARE APPLICATION MONEY BY SUJANA GROUP... Q. NO. 16 I AM SHOWING YOU SHEET NO. 36 OF ANNEXURE A/PVR/6. IN THE SAID SHEET AT SL. NO. 3 INITIALS PVRR ARE MENTIONED. DO YOU AGREE WHETHER PVRR REFERS TO YOUR NAME? ANSWER YES, PVRR REFERS MY NAME. 3.7 SIMILARLY HE HAS ALSO EXPLAINED RELEVANT DOCUMENTS IN HIS STATEMENTS DATED 1.12.2004 U/S. 132(4) OF THE I.T. ACT. THE RELEVANT EXTRACT IS TAKEN AS UNDER: Q. NO. 11 PLEASE PERUSE REPLY TO Q. NO. 14 WHEREI N YOU HAD STATED THAT A PART OF THE FUNDS WERE MOBILISED BY YOU. DO YOU CONFIRM? ANSWER YES, I DO CONFIRM. Q. NO. 12 PLEASE IDENTIFY VR 1? ANSWER VR-1 STANDS FOR FUNDS MOBILISED BETWEEN 1995 TO 1997. VR-2 REPRESENTS FUNDS MOBILISED PRIOR TO 1995. Q. NO. 13 CAN YOU IDENTIFY THE PERSONS FROM WHOM THE FUNDS WERE MOBILISED. ANSWER NO. 3.8 THE ABOVE EXTRACTS ONLY SHOWS THAT ASSESSEE IS NOT UNAWARE OF DETAILS CONTAINED IN THE SEIZED DOCUMENT S, WHICH WERE TAKEN FROM HIS CUSTODY CONTRARY TO WHAT WAS EX PLAINED BY HIM BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASS ESSEE HAS STATED TIME AND AGAIN THAT THE AMOUNTS MOBILISED IN THE NAME I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 7 OF DIFFERENT GROUPS RELATE TO SUJANA GROUP OF CONCE RNS AND THE MONEY RELATES TO MOBILISATION OF SHARE CAPITAL. HO WEVER, THE ASSESSEE WAS NEVER ABLE TO ESTABLISH HIS CLAIM THAT THE MONEY MOBILISED AS NARRATED IN A/PVR/5 TO A/PVR/7 RELATES TO SUJANA GROUP OR PARTICULAR PERSONS/CONCERNS OF SUJA NA GROUP AND THE MONEY WAS ON ACCOUNT OF SHARE CAPITAL. NEI THER DURING THE COURSE OF SEARCH OR POST SEARCH INVESTIGATIONS OR ASSESSMENT PROCEEDINGS, DETAILS OR EVIDENCES WERE F URNISHED TO SUPPORT THE CLAIM THAT THE TRANSACTIONS ARE IN THE NATURE OF SHARE CAPITAL MOBILISATION AND FOR SUJANA GROUP OF COMPANIES. ACCORDINGLY, THE DOCUMENTS SEIZED FROM THE ASSESSEE ARE PRESUMED TO BELONG TO HIM AND HIS EFFORTS TO EXPLAI N AWAY THE TRANSACTIONS THEREIN DURING THE COURSE OF ASSESSMEN T PROCEEDINGS AND EARLIER HAVE MISERABLY FAILED. 3.9 THE ASSESSING OFFICER HAS MADE SUBSTANTIAL ADDITION FOR A.YS. 1999-2000 TO 2001-02 ON THE BASIS OF SEIZED D OCUMENTS A/PVR/1 TO A/PVR/4. HOWEVER, NOWHERE IN THE ASSESS MENT ORDER THE ENTRIES HAVE BEEN DISCUSSED OR NARRATED B Y THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD NOT G IVEN THE BASIS FOR ARRIVING AT THE FIGURES TAKEN BY HIM FOR ADDITION. IT HAS NOT BEEN EXPLAINED HOW THE FIGURES HAVE BEEN AR RIVED AT. SHOW-CAUSE LETTERS OR QUESTIONNAIRE ISSUED BY THE A SSESSING OFFICER HAS NOT COVERED A/PVR/1 TO A/PVR/4. IN THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE FILED RECEIPT AN D PAYMENT ACCOUNT AND OFFERED INCOME AS FOLLOWS: RS. IN LAKHS FINANCIAL YEARS 1998-99 1999-2000 2000-2001 2001-02 TOTAL RECEIPTS 8.84 34.22 126.51 25.31 TOTAL PAYMENTS 3.07 31.46 167.80 26.35 NET BALANCE 5.77 2.76 40.29 1.04 I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 8 3.10 THUS, THE ASSESSEE OFFERED TOTAL SUM OF RS. 2,86,83 ,440 AS PER TRANSACTIONS AS RELATE TO HIM THOUGH IT PERTAIN TO THE PERIOD 1995. THE ABOVE OFFER IS ON THE BASIS OF FIGURES A S PROVIDED BY THE ASSESSEE AS FOLLOWS: (RS. IN LAKHS) FY 1998-99 FY 1999-2000 FY 2000-2001 FY 2001-2002 NAME OF THE ASSESSEE RECEIPTS PAYMENTS RECEIPTS PAYMENTS RECEIPTS PAYMEN TS RECEIPTS PAYMENTS SURENDRA 1.34 1.10 15.62 4.00 5.00 63.20 9.50 15.25 JITIN KUMAR 2.50 1.94 0.00 14.00 50.01 58.05 Y. SIVALINGA PRASAD 5.50 0.03 18.60 13.23 72.50 46.44 12.00 11.10 SURENDRA REDDY - - - 0.15 - 0.11 Y. RISHI KANYA 3.81 TOTAL 8.84 3.07 34.22 31.46 127.51 167.80 25.31 26 .35 TOTAL RECEIPTS 8.84 34.22 127.51 25.31 TOTAL PAYMENTS 3.07 ` 31.46 167.80 26.35 NET BALANCE 5.77` 2.76 -40.29 -1.04 3.11 HOWEVER, THERE WAS A PAYMENT RELATING TO Y. JITIN K UMAR AT RS. 8 LAKHS IN THE FINANCIAL YEAR 2001-02 WHICH WAS NOT REFLECTED IN THE PAYMENT AS SHOWN ABOVE AT RS. 26.3 5 LAKHS IN THE FY 2001-02 WHICH WORKED OUT NOW AFTER ADDING RS . 8 LAKHS AT RS. 34.35 LAKHS. THUS, THE INCOME OFFERED BY TH E ASSESSEE ON THE BASIS OF A/PVR/1 TO A/PVR/4 WAS TAKEN AS UND ER: A.Y. AMOUNT (RS. IN LAKHS) 1999-2000 5.77 2000-2001 2.76 2001-2002 40.29 2002-2003 9.04 3.12 THE CIT(A) ACCEPTED THE ADDITIONAL INCOME OFFERED B Y THE ASSESSEE FOR A.YS. 1999-2000 TO 2001-2002 AT RS. 5. 77 LAKHS, RS. 2.76 LAKHS, RS. 40.29 LAKHS AS MENTIONED ABOVE. HE DIRECTED THE ASSESSING OFFICER TO SUBSTITUTE THE AB OVE ADDITIONS IN PLACE OF RS. 36 LAKHS, RS. 105 LAKHS AND RS. 203 LAKHS FOR I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 9 THE A.YS. 1999-2000, 2000-01 AND 2001-02. FOR A.Y. 2002-03 HE DIRECTED TO ACCEPT RS. 9.04 LAKHS. 3.13 REGARDING COMPUTATION OF PEAK CREDIT RELATING TO A. Y. 2002-03 AND A.Y. 2005-06, THE CIT(A) OBSERVED THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THE CLAIM WITH D ETAILS AND EVIDENCES. THOUGH IT WAS STATED THAT TRANSACTIONS RELATE TO SUJANA GROUP. FURTHER M/S. SUJANA GROUP HAS ALSO N OT CONFIRMED THE SUBMISSIONS OF THE ASSESSEE. THE CIT (A) WAS OF THE OPINION THAT THE ASSESSING OFFICER HAD ADDED IN TEREST TWICE TO A SUBSTANTIAL EXTENT. HOWEVER, ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE DURING THE COURSE OF APPEAL PR OCEEDINGS HAD GIVEN A CONCLUSION THAT THE AMOUNT MENTIONED IN THE SEIZED MATERIAL HAS 'PRINCIPALS' HAS BEEN CONSIDERE D AS ASSESSEE'S OWN FUNDS AND, THEREFORE, NO ADDITION SH OULD BE MADE ON ACCOUNT OF INTEREST PAYMENT. AS PER THE AS SESSEE'S OWN SUBMISSIONS FILED BEFORE THE LEARNED CIT(A), TH E PEAK CREDIT OF THE AMOUNT MENTIONED AS PER SEIZED MATERIAL UP T O 31.10.2001 ARRIVED AT RS. 15,09,50,605. HOWEVER, T HE PEAK CREDIT AS ON 1.7.2004 IS RS. 15,35,29,936. HE ACCO RDINGLY ADDED THE PEAK CREDIT OF RS. 15,09,50,615 AND RS. 2 5,79,321 FOR THE A.Y. 2002-03 AND A.Y. 2005-06, RESPECTIVELY . 3.14 FROM THESE PEAK AMOUNTS THE CIT(A) FURTHER ALLOWED DEDUCTION AND ARRIVED AT A PEAK CREDIT OF RS. 8,34, 78,490 AND THE SAME WAS CONSIDERED AS INCOME OF THE ASSESSEE F OR THE A.Y. 2002-03. HOWEVER, ON FURTHER APPEAL THE SAME WAS R EDUCED TO RS. 2,43,21,090 BY THE TRIBUNAL. FOR A.Y. 2003-04, THE ASSESSEE ADMITTED NEGATIVE CASH BALANCE OF RS. 1,84 ,47,285 AND THE SAME WAS TREATED BY THE ASSESSING OFFICER A S ADDITION THE RETURNED INCOME. I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 10 3.15 FOR THE A.Y. 2005-06 THE PEAK CREDIT WAS ARRIVED AT RS. 25,79,321 AND ADDED TO THE ASSESSEE'S RETURNED INCO ME ON WHICH THE ASSESSEE THOUGH WENT IN APPEAL BEFORE THE ITAT WHERE THIS GROUND WAS NOT PRESSED. FINALLY THE ASS ESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) OF THE ACT FO R THESE ASSESSMENT YEARS AS FOLLOWS: A.Y. AMOUNT (RS.) 1999-00 1,74,100 2000-01 96,000 2001-02 13,18,000 2002-03 73,83,000 2003-04 53,11,000 2005-06 8,75,000 3.16 ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY ON T HE REASON THAT THE ASSESSEE CAME UP WITH THE OFFER OF ADDITIONAL INCOME FOR VARIOUS YEARS ONLY WHEN HE WAS PUSHED TO THE WALL AND HE FACED WITH HUGE DEMAND RAISED BY WAY OF ASSE SSMENT ORDERS WHICH WAS AFFIRMED BY THE TRIBUNAL, WERE IND EED BASED ON SEIZED MATERIAL, POST SEARCH INVESTIGATIONS AND THE STATEMENT OF THE ASSESSEE HIMSELF. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOR THE A.YS. 1999-2000, 2000-01, 2001-02, 2002-03, 200 3-04 ADDITION ON ACCOUNT UNEXPLAINED CREDIT ON THE BASIS A/PVR/5 TO A/PVR/7 WAS DELETED AND SUBSTITUTED ONLY FOR A.Y S. 2002-03 AND 2005-06. FURTHER HE SUBMITTED THAT FOR THE A.Y . 1999- 2000 THE ASSESSEE OFFERED RS. 5,77,000 AND THE SAME WAS CONSIDERED AS UNDISCLOSED INCOME BY THE ASSESSING O FFICER AND PENALTY AT RS. 1,74,100 WAS LEVIED WHICH IS INCORRE CT AND THE SAME HAS TO BE DELETED. FOR A.Y. 2000-01 A SUM OF RS. 2,76,000 WAS OFFERED AS UNDISCLOSED INCOME BY THE A SSESSEE I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 11 AND THE SAME WAS CONSIDERED BY THE ASSESSING OFFICE R AND PENALTY OF RS. 96,000 WAS LEVIED. FOR A.Y. 2001-02 THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS. 40,29,000 . THE CIT(A) CONFIRMED RS. 40.29 LAKHS FOR A.Y. 2001-02. THE AS SESSING OFFICER LEVIED PENALTY FOR THIS YEAR AT RS. 13,18,0 00. FOR A.Y. 2002-03 THE ASSESSING OFFICER ERRED IN CONSIDERING THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE AT RS. 2, 43,21,090 AND LEVIED PENALTY OF RS. 73,83,000. FOR THE A.Y. 2003-04, THE ASSESSEE OFFERED NEGATIVE PEAK CASH BALANCE OF RS. 1,84,47,285, THE ASSESSING OFFICER CONSIDERED THE SAME TO LEVY P ENALTY OF RS. 58,11,000. FOR THE A.Y. 2005-06 UNEXPLAINED PEAK C ASH CREDIT WAS ARRIVED AT BY THE CIT(A) AT RS. 25,79,321 AND T HE ASSESSING OFFICER CONSIDERED THE SAME FOR LEVYING PENALTY AT RS. 8,75,000. 4.1 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIONS SUSTAINED BY THE APPELLATE AUTHORITIES AN D ACCEPTED BY THE ASSESSEE ON REASON THAT THE ASSESSEE DOES NO T WANT TO PROLONG THE LITIGATION AND THAT ITSELF CANNOT BE CO NSTRUED AS FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALMENT OF INCOME. THUS, THE CIT(A) SUBSTITUTED THE ADDITION MADE BY THE ASSESSING OFFICER BY SOME NEW FIGURES ON THE BASIS OF CERTAIN SEIZED MATERIAL MARKED AS A/PVR/5 TO A/PVR/7. ON T HE SAME BASIS THE TRIBUNAL DELETED CERTAIN ADDITIONS AND RE DUCED THE UNEXPLAINED INCOME OF THE ASSESSEE. ACCORDING TO T HE LEARNED COUNSEL FOR THE ASSESSEE THERE IS NO CONCLUSIVE EVI DENCE TO SHOW THAT THE ASSESSEE HAS ACTUALLY CONCEALED THE INCOME . A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DELIB ERATE ACT OF OMISSION OR CONCEALMENT OF INCOME. ACCORDING TO TH E LEARNED COUNSEL FOR THE ASSESSEE IN ORDER TO JUSTIFY THE LE VY OF PENALTY TWO FACTORS MUST EXIST. THERE MUST BE SOME MATERIA L OR I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 12 CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES NOT REPRESENT THE ASSESSEE'S INCOME. IT IS NOT ENOUGH FOR THE POSSIBLE LEVY OF PENALTY THAT THE AM OUNT HAS BEEN ASSESSED AS INCOME AND CIRCUMSTANCES MUST SHOW THAT THERE WAS CONSCIOUS CONCEALMENT OR ACT OF FURNISHIN G INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE DISCREPANCIES NOTICED BY THE LOWER AUTHORITIES MAY BE ENOUGH TO MAKE ADDITION WHILE FRAMING ASSESSMENT BUT THE S AME IS NOT ENOUGH FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE AC T. LEVY OF PENALTY IS NOT AUTOMATIC BASED UPON THE ADDITIONS M ADE IN THE ASSESSMENT. THE GENUINE BASIS IN COMPUTATION OF IN COME BY THE ASSESSEE AS COMPARED TO THE DEPARTMENT CANNOT I TSELF BE A REASON FOR LEVY OF PENALTY. THERE IS NO DELIBERATE DEFAULT AND MISTAKE. ONLY IT IS A BONA FINE MISTAKE WHILE MAKI NG THE COMPUTATION OF INCOME. HE RELIED ON THE FOLLOWING JUDGEMENTS. 4.2 ACIT VS. VIP INDUSTRIES (112 TTJ 289) WHEREIN IT WAS HELD THAT IN ALL CASES WHERE ADDITION MS MADE THE PENALT Y WAS NOT AUTOMATICALLY FOLLOW. THE TRUE EFFECT IS THAT MENS REA IS NOT TO BE PROVED BY THE REVENUE. IF THE A CAN SUCCESSFUL LY PROVE HIS BONA FIDE BY TENDERING A VALID EXPLANATION THEN, PE NALTY CANNOT BE LEVIED. HENCE, IN CASE OF GENUINE DIFFERENCE BET WEEN AO AND THE ASSESSEE, PENALTY CANNOT BE LEVIED. 4.3 IN THE CASE OF CIT VS. SIDDHARTH ENTERPRISES (184 TAXMAN 460) THE PUNJAB & HARYANA HIGH COURT HELD THAT PENALTY CAN BE IMPOSTS ONLY WHEN THERE SOME ELEMENT OF DELIBERATE DEFAULT AND NOT WHEN THERE IS A MERE MISTAKE OR BONA FIDE CLAIM . 4.4 CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158) WHEREIN IT WAS HELD THAT 'PARTICULARS' MEANS DETAIL S OF THE CLAIM I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 13 MADE WHERE INFORMATION GIVEN IS NOT FOUND TO BE INC ORRECT, ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCU RATE PARTICULARS OF INCOME FOR THE PURPOSE OF LEVY OF PE NALTY U/S. 271(1)(C) OF THE ACT. IT WAS FURTHER HELD THAT MER E MAKING A WRONG CLAIM DOES NOT AMOUNT TO FURNISHING INACCURAT E PARTICULARS OF INCOME. IN THE ABSENCE OF FINDING T HAT ANY DETAILS SUPPLIED BY THE ASSESSEE IS INCORRECT OR FALSE PENA LTY CANNOT BE LEVIED. 4.5 IN THE CASE OF MAHAVIR IRRIGATION PVT. LTD. VS. CIT [314 ITR 150 (AT)] WHEREIN IT WAS HELD THAT SINCE ASSESSMENT PROCEEDI NGS AND PENALTY PROCEEDINGS WERE SEPARATE AND DISTINCT, THE FINDING IN THE ASSESSMENT PROCEEDINGS COULD NOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF PENALTY PROCEEDINGS AND COULD NOT BE TAKEN AS CONCLUSIVE FOR THE PURPOSE OF HOLDI NG THE ASSESSEE LIABLE FOR CONCEALMENT AND IMPOSING PENALT Y UNDER SECTION 271(1)(C) OF THE ACT. SINCE NEITHER OF THE TWO EVENTS, I.E., SIGNING OF CONTRACT BETWEEN THE DTC AND DMIL OR PLA CEMENT OF ORDER BY DTC ON DMIL FOR THE SUPPLY OF BUSES HAD TA KEN PLACE DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE C OULD REASONABLY CLAIM THAT NO FEES HAD BECOME PAYABLE TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND THERE WAS NO ACCRUAL OF INCOME ON ACCOUNT OF SUCH FEES. THE CLA IM OF THE ASSESSEE WAS BASED ON AN INTERPRETATION GIVEN TO TH E RELEVANT CLAUSES AND HAVING BEEN ACCEPTED BY THE ASSESSING O FFICER WHILE COMPLETING THE ASSESSMENT, THE INTERPRETATION GIVEN BY THE ASSESSEE WAS A POSSIBLE ONE. MOREOVER, ALL THE RELEVANT PARTICULARS RELATING TO THE SAID CLAIM WERE DULY FU RNISHED BY THE ASSESSEE ALONG WITH ITS RETURN OF INCOME INCLUDING A COPY OF THE MEMORANDUM OF UNDERSTANDING. THE CLAIM OF THE ASSE SSEE I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 14 TREATING THE AMOUNT OF RS. 3 CRORES RECEIVED FROM D MIL AS SECURITY DEPOSIT WAS BONA FIDE AS IT WAS BASED ON T HE INTERPRETATION GIVEN TO THE MEMORANDUM OF UNDERSTAN DING AND ALTHOUGH THE CLAIM WAS NOT FOUND TO BE ACCEPTABLE I N THE QUANTUM PROCEEDINGS ON THE MERITS, IT WAS NOT A CAS E OF CONCEALMENT AS ENVISAGED IN SECTION 271(1)(C) OF TH E ACT ATTRACTING LEVY OF PENALTY ESPECIALLY WHERE ALL THE MATERIAL FACTS RELEVANT TO THE SAID CLAIM WERE DULY FURNISHED BY T HE ASSESSEE BEFORE THE ASSESSING OFFICER. (THE PENALTY IMPOSED WAS SET ASIDE). 4.6 IN THE CASE OF ROSHAN LAL MADAN VS. ACIT (67 ITD 33) THE TRIBUNAL HELD THAT EXPLANATION 1, WHICH IS RELEVANT IN THE INSTANT CASE, CONSISTS OF TWO CLAUSES; CLAUSE (A) P ROVIDES THAT THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFER S AN EXPLANATION WHICH IS FOUND TO BE FALSE. CLAUSE (B) PROVIDES FOR THE SITUATION WHERE THE ASSESSEE IS NOT ABLE TO SUB STANTIATE THE EXPLANATION AND FAILS TO PROVE THAT THE EXPLANATION IS BONA FIDE. IN THE SITUATIONS ENVISAGED BY THE AFORESAID CLAUSE S, DEEMING FICTION WOULD COME INTO PLAY AND THE AMOUNT ADDED I N THE TOTAL INCOME WOULD BE DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED. THIS EX PLANATION ENACTS A RULE OF EVIDENCE WHICH HAS THE EFFECT OF S HIFTING THE BURDEN OF PROOF ON THE ASSESSEE. IT IS WELL SETTLE D THAT THE DEGREE OF PROOF REQUIRED FOR PROVING A NEGATIVE FAC T WOULD NOT BE AS HEAVY AS REQUIRED FOR PROVING A POSITIVE FACT. IN THE CASE OF PROVING A NEGATIVE FACT, THE TEST OF PREPONDERANCE OF PROBABILITIES WOULD APPLY. IF THE ASSESSEE IS ABLE TO FURNISH A BONA FIDE AND PLAUSIBLE EXPLANATION IN RESPECT OF M ATERIAL FACTS, THE BURDEN CAST BY THE EXPLANATION WOULD BE DISCHAR GED AND I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 15 THE CASE WOULD NOT BE HIT BY THE MISCHIEF OF THE SA ID EXPLANATION. FURTHER, MERELY BECAUSE THE EXPLANATI ON FURNISHED BY THE ASSESSEE WAS CONSIDERED UNSATISFAC TORY OR UNREASONABLE WOULD NOT IPSO FACTO JUSTIFY THE INVOC ATION OF CLAUSE (A) TO LEVY PENALTY UNDER SECTION 271(1)(C). 5. ON THE OTHER HAND, THE DR SUBMITTED THAT IN RESPON SE TO THE NOTICE ISSUED U/S 143(3), THE ASSESSEE FILED IT S RETURN OF INCOME ON 13.12.2006 DECLARING INCOME AS FOLLOWS: SL.NO. ASSESSMENT YEAR RETURN OF INCOME 1 1999-2000 2.25 LAKHS 2 2000-01 1,95,400/- 3 2001-02 1,95,400/- 4 2002-03 1,90,400/- 5 2003-04 1,85,400/- 6 2004-05 9,22,000/- 7 2005-06 9,54,040/- LATER THE ASSESSING OFFICER MADE THE ADDITIONS. TH E ASSESSEE AT VARIOUS STAGES OFFERED INCOME FOR VARIOUS ASSESSMEN T YEARS AT RS.2,86,83,440/-. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUB MITTED THAT SINCE THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE TRANSACTIONS AS THEY ARE VERY OLD AND HE CAME UP WITH AN OFFER O N SEARCH OF DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND SW ORN STATEMENT RECORDED, SUGGESTED THE CONCEALMENT OF IN COME. HE FURTHER SUBMITTED THAT THE ADDITIONS WERE NOT OFFER ED ON VOLUNTARY BASIS; RATHER THE ASSESSEE WAS NON COOPER ATIVE DURING THE SEARCH AS WELL AS DURING THE ASSESSMENT PROCEED INGS. THERE WAS A DELIBERATE ATTEMPT TO CONCEAL THE INCOM E OF THE UNACCOUNTED TRANSACTIONS WHICH WAS WITHIN THE PERSO NAL I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 16 KNOWLEDGE OF THE ASSESSEE AND HE HAD ATTEMPTED TO M AINTAIN OF SUCH RECORDS FOR HIS PERSONAL MEMORY. BECAUSE OF O NLY SEARCH ACTIONS, THESE TRANSACTIONS CAME TO LIGHT AND THIS CASE IS FIT TO CONFIRM THE PENALTY. HE RELIED ON THE JUDGEMENT IN THE CASE OF UNION OF INDIA & OTHERS VS DHARMENDRA TEXTILES PROC ESSORS & OTHERS (306 ITR 277) (SC). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE T HROUGH THE MATERIALS. ADMITTEDLY, THE ASSESSEE OWNED THE UNAC COUNTED TRANSACTIONS ONLY AFTER SEARCH ACTION TAKEN PLACE I N THE CASE OF THE ASSESSEE ON 7.10.2004. THE ASSESSEE OFFERED ADDITIONAL INCOME AS HE WAS NOT IN A POSITION TO EXPLAIN THE S EIZED MATERIAL A/PVR/1 TO A/PVR/4, ADMITTING THAT THOSE R ECORDS CONNECTED TO BE RECEIPTS AND PAYMENTS HAPPENING IN THE INTER GROUP COMPANY AND HAD BEEN MAINTAINED FOR THE PURPO SE OF HIS MEMORY. HE STATED THAT THE TRANSACTIONS ARE VERY DI FFICULT FOR HIM TO RECONCILE WITH RECORDS AS THE SAME ARE VERY OLD. HOWEVER, HE ADMITTED THE RECEIPTS AND PAYMENTS FOR YEAR WISE, FOR ALL THE PERSONS. FINALLY, HE OFFERED A SUM OF RS.2,86,83,440/- AS INCOME FROM THESE TRANSACTIONS. ACCORDINGLY, THE CIT(A) WHILE DECIDING THE QUANTUM ISSUE WAS ALSO OF THE OPINION THAT THE AMOUNT MENTIONED IN TH E SEIZED MATERIAL AS PRINCIPLE HAD BEEN CONSIDERED AS THE ASSESSEES OWN FUNDS, NO FURTHER ADDITION ON ACCOUNT OF INTERE ST PAYMENT HAVE BEEN REQUIRED. HOWEVER, THE ADDITIONAL INCOM E OFFERED BY THE ASSESSEE WAS NOT ON VOLUNTARY BASIS, NOR ANY OF FER WAS MADE DURING THE COURSE OF POST SEARCH ENQUIRY OR DU RING THE ASSESSMENT PROCEEDINGS. THE ADDITIONAL INCOME WAS OFFERED ONLY WHEN THE ASSESSEE WAS PUSHED TO THE WALL AS HE WAS FACED I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 17 WITH THE HUGE DEMAND RAISED BY WAY OF ASSESSMENT OR DER. CONSIDERING THESE FACTS, WHILE DECIDING THE PENALTY ISSUE, THE FIRST APPELLATE AUTHORITY CONFIRMED THE LEVY OF PEN ALTY. THE CIT(A) WAS OF THE OPINION THAT THOUGH THE TRANSACTI ONS WERE WITHIN THE KNOWLEDGE OF THE ASSESSEE, IT WAS NOT BR OUGHT TO THE KNOWLEDGE OF THE DEPARTMENT, UNTIL HE WAS COMPELLED TO ADMIT TO EXPLAIN THE SAME. 7.1 FURTHER, ACCORDING TO CIT(A), THE EXPLANATIONS OFFERED BY THE ASSESSEE DID NOT PROVE THAT HE IS BONA FIDE. W HEN THE ASSESSEE ADMITS THAT HE HAS COMMITTED A WRONG, IT C ANNOT BE SAID THAT HIS STATEMENT IS FALSE OR NOT BONA FIDE. THE ASSESSEE HEREIN ADMITTED HIS MISTAKE AND OFFERED THE ADDITIO NAL INCOME FOR TAXATION. THUS, THE QUESTION REMAINS TO BE CON SIDERED IS WHETHER THE PENALTY IS AUTOMATIC, EVEN IF THE ASSES SEE CORRECTS HIS MISTAKE. NEITHER THE FIRST APPELLATE AUTHORITY NOR THE TRIBUNAL IS NOT COMPLETELY CLEAR ABOUT THE EXACT AM OUNT OF CONCEALMENT. THE ASSESSEE HEREIN ADMITTED THAT THE RE IS CERTAIN LAPSE ON HIS PART. IN THIS CASE, THE ASSES SING OFFICER HAS MADE ADDITIONS TOWARDS PRINCIPLE AND INTEREST, THE CIT(A) DELETED CERTAIN ADDITIONS THERE AFTER SUBSTITUTED S OME OTHER ADDITIONS, TRIBUNAL ALSO DELETED CERTAIN ADDITIONS WHICH IS EVIDENT FROM THE BELOW MENTIONED TABLE: S..N ASSESSMENT YEAR RETURN FILED BY THE ASSESSEE ASSESSED BY THE ASSESSING OFFICER DETERMINED BY THE CIT(A) FINAL INCOME DETERMINED BY TRIBUNAL ORDER 1 1999-2000 1,95,400 10,695,400 4.71 LAKHS NO APPEA L 2 2000-2001 1,95,400 210.92 LAKHS 48.21 LAKHS 40.21 LAKHS 3 2002-2003 190.4 LAKHS 633.76 LAKHS 834.78 LAKHS 2 43.21 LAKHS 4 2003-2004 1.85 LAKHS 666.13 LAKHS 186.33 LAKHS NO APPEAL 5 2004-05 NO APPEAL 6 2005-06 9.54 LAKHS 594.11 LAKHS 43.94 LAKHS 35.33 LAKHS I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 18 THE ABOVE TABLE SHOWS THAT THERE IS NO CONCLUSIVE E VIDENCE WHILE DETERMINING THE INCOME BY THE LOWER AUTHORITI ES FOR LEVYING OF PENALTY U/S 271(1)( C). THE ASSESSING O FFICER IS REQUIRED TO SATISFY HIMSELF ABOUT THE CONCEALMENT O F INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. IT GIVES DISCRETION TO THE ASSESSING OFFICER TO EXONERATE TH E ASSESSEE FROM LEVY OF PENALTY EVEN IN CASE WHERE THE ASSESSE E HAS CONCEALED THE INCOME OR FURNISH INCORRECT PARTICULA RS OF INCOME. THE EXPRESSION IN SECTION 271(1)(C) READS AS FOLLO WS: IF THE ASSESSING OFFICER ............ IS SATISFIED THAT IN PERSON ........ (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME; HE MAY DIRECT ....... 8. THAT ABOVE PROVISION SHOWS THAT THE ASSESSING O FFICER IS VESTED WITH A DISCRETIONARY POWER TO LEVY OR NOT TO LEVY ANY PENALTY IN A DESERVING CASE. IN THE CASE OF HINDUS TAN STEEL LTD VS. STATE OF ORISSA (83 ITR 26) (SC), HELD THAT PE NALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO . THE ASSESSING OFFICER HAS TO EXERCISE HIS DISCRETION JU DICIOUSLY. IF AN ASSESSEE FILES THE REVISED RETURN THOUGH AT A LA TER STAGE OR DISCLOSED TRUE INCOME, PENALTY NEED NOT BE LEVIED. NO DOUBT, MERELY OFFERING ADDITIONAL INCOME WILL NOT AUTOMATI CALLY PROTECT THE ASSESSEE FROM LEVY OF PENALTY BUT IN A GIVEN CA SE WHERE THE ASSESSEES CASE, CAME FORWARD WITH ADDITIONAL INCO ME THOUGH AFTER DEDUCTION ON ACCOUNT OF THAT THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN PROPERLY, THE SEIZED MATERIAL A ND EXPRESS REMORSE, IN HIS CONDUCT UN-HESITANTLY, THE ASSESSIN G OFFICER I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 19 MIGHT HAVE TO EXERCISE THE DISCRETION IN FAVOUR OF SUCH ASSESSEE AS OTHERWISE THE EXPRESSION MAY IN SECTION 271(1) (C) OF THE ACT REMAINS REDUNDANT. IF IT IS TO BE UNDERSTOOD THAT IN A CASE OF ADMITTED CONCEALMENT PENALTY IS NOT AUTOMATIC. THE DISCRETION VESTED IN THE OFFICER SHOULD BE USED NOT TO LEVY TH E PENALTY. IN OUR OPINION, THE CASE BEFORE US IS MOST BEFITTING C ASE TO EXERCISE SUCH DISCRETION, PARTICULARLY THERE IS DIVERGENT OF OPINION AMONG THE LOWER AUTHORITIES AS WELL AS THE TRIBUNAL WHILE DELETING OR SUSTAINING THE ADDITION. IT SHOWS THAT THERE IS NO CONCLUSIVE PROOF THAT THE ASSESSEE CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. FURTHE R AS SEEN FROM THE FACTS OF THE CASE, TO AVOID LITIGATION THE ASSESSEE ACCEPTED THE ADDITIONS OR MADE FRESH OFFER IN THE C OURSE OF THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES. AFTER TH E ASSESSING OFFICER HAD THE CLINCHING EVIDENCE OF CONCEALMENT T HEN THE OFFER MAY NOT HAVE BEEN ACCEPTED AND THE SAME SHOULD HAVE BEEN PROCEEDED ON THE BASIS OF MATERIAL AVAILABLE ON REC ORD. THE LOWER AUTHORITIES RELIED ON PROCEEDINGS BEFORE ASSE SSING OFFICER FOR LEVYING THE PENALTY. THE SAME DO NOT CONSTITUT E ADMISSION FOR THE PURPOSE OF LEVYING PENALTY. THE ADDITION M ADE ON THE BASIS OF MORE OR LESS ON THE OFFER MADE BY THE ASSE SSEE AND THE ASSESSING OFFICER NOT BROUGHT ENOUGH INCRIMINATING MATERIAL FOR CONCEALMENT AND THERE IS NO MATERIAL FOR ESTABLISHI NG THE CONCEALMENT INDEPENDENTLY IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE PENALTY IS NOT LEVIABLE AND TH E SAME IS DELETED. I.T.A. NOS. 1852-1857/HYD/2011 SHRI P.V. RAMANA REDDY ========================== 20 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6.1.2012 SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 6 TH JANUARY, 2012 COPY FORWARDED TO: 1. SHRI P.V. RAMANA REDDY, C/O. M/S. P. MURALI & CO ., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD-82. 2. THE INCOME TAX OFFICER, WARD-6(3), HYDERABAD. 3. THE CIT(A)-IV, HYDERABAD. 4. THE CIT-III, HYDERABAD. 4. THE DR B BENCH, ITAT, HYDERABAD TPRAO/NP